Topic Archive: Deferral Suspension

Do We Still Need to Suspend Deferrals Following a Hardship Distribution?

DWC | 02/25/20

Facts

Larry and Kent are both participants in our company’s 401(k) plan.  Both recently went back to school on a part-time basis to pursue graduate degrees and will continue working for us.  Each of them took hardship distributions to help pay for tuition, Larry on September 18, 2019, and Kent on January 3, 2020.  Both of them would like to resume making contributions to the plan as soon as possible.

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Are We Still Required to Suspend Deferrals Following a Hardship Distribution?

DWC | 12/11/18

Facts

I sponsor a 401(k) Plan for myself and my staff. I recently processed a hardship distribution for the purchase of my primary residence in October 2018.  I know the rules require me to suspend my deferral elections for six months following a hardship distribution, but I recently came across an article that said I don’t have to impose the suspension anymore.  I’d really like the opportunity to continue deferring if I am allowed.

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